Sizewell C developers welcome new funding model for nuclear projects
The UK Government hopes the new model will attract more British investment but opposition group says it will add more expense to the consumer.
The UK Government's new approach to funding future nuclear projects has received an endorsement from the developers of the controversial nuclear plant Sizewell C in East Suffolk.
The Regulated Asset Base (RAB) approach will involve electricity customers fronting a portion of the building costs before the project is fully functional, through a small rise in their bills. It is hoped that doing so will reduce the risk for British investors, who will then be enticed to finance the rest of the project.
"It's really great news", says Julia Pyke is Sizewell C's Financing & Economic Regulation Director. She adds that building capacity for nuclear power is all the more important now, off the back of rising energy prices and low wind speeds.
But opposition group 'Stop Sizewell C' are less enthused about the new model. A spokesperson from the campaign, Charles Macdowell says: "There is nothing in the legislation that specifies how much of the cost will be shifted onto consumers' electricity bills."
"This is an extra tax on ordinary people to fund a nuclear plant that's not really needed", he adds.
Ms. Pyke however says that the cost on consumers will be minimal: " The amount that will be added to bills will be really low. In this Parliament it will be less than two pounds year per family and less than one pound a month once the construction begins."
A statement from the Government explains once the nuclear plant is built, it will lead to savings of a much greater tune for customers: "It translates to a saving of more than ÂŁ10 per year for an average domestic dual fuel bill throughout the life of the nuclear power station, which can operate for 60 years."
Ms. Pyke also says the model is needed to move away from investments from foreign companies, which tend to pull out mid-way through projects. This was the case when Hitachi pulled the plug on plans to build a nuclear plant in North Wales in September, last year.
"This new approach is designed to help British investors come forward and invest in British nuclear power, for our domestic energy security. It will also be the answer to the previous collapsed projects" she adds.
But Mr. Macdowell says the move places greater burden on the public to finance a project that other investors are unwilling to support. "We've ebeen talking to a lot of financial institutions and pension funds who won't touch it with a bargepole."
"What this means is that those willing to invest will only do so if offered a greatly advantageous position. That burden will come back onto the consumer", he adds.
Sizewell C has currently just finished the examination phase in the planning process. A decision on its future will be made next Spring.